Technology
Oracle records strong growth in the first quarter and focuses on cloud expansion with AWS
Oracle is experiencing significant growth in the cloud business and announces a groundbreaking collaboration with AWS.
The US software giant Oracle recorded solid revenue growth in the first quarter of fiscal year 2024, significantly driven by its cloud business. The cloud infrastructure (IaaS) segment, in particular, saw strong growth, while the company announced an extensive collaboration with Amazon subsidiary AWS. This partnership is expected to make Oracle databases more widely available on the leading cloud platform. The news caused Oracle's stock to rise by almost 9 percent in pre-market US trading.
In the quarter ending in August, Oracle achieved a 7 percent increase in revenue to $13.3 billion. The cloud business, which grew by 20 percent to $5.6 billion, was a significant driver of this growth. Within this segment, the "Infrastructure as a Service" area grew by almost 50 percent. The collaboration with AWS is expected to further accelerate this growth, as customers can now more easily migrate their Oracle databases to Amazon's cloud platform.
Successful Cloud Business and Partnerships in Focus
Oracle further expands its position in competition with major cloud providers such as AWS, Google Cloud, and Microsoft Azure. In particular, founder and CTO Larry Ellison emphasized the importance of cloud solutions for Artificial Intelligence (AI). He sees a growing need for computing power as increasingly complex AI models are developed. Ellison expressed optimism that the increasing size of data centers will also lead to lower costs.
Financial Strength and Growth Plans
Oracle reported a 13 percent increase in adjusted operating profit to $5.7 billion for the first quarter. Net profit rose by 21 percent to $2.9 billion, while adjusted earnings per share climbed to $1.39 – better than analysts had expected. These figures support Oracle's goal of continuing double-digit percentage revenue growth.
Oracle stock strongly benefited from the announcements. Analysts like Karl Keirstead from UBS emphasized that the AWS deal was concluded early and would further support the company. Keirstead raised the Oracle stock price target to $175 and recommended buying. Analysts from Evercore ISI also praised the significantly increased order backlog in the cloud business.
